Asset classes every investor should know
“Never put all your eggs in one basket”
Good investors know that only a diversified portfolio is a healthy portfolio. This was once said by Warren Buffett, founder and CEO of Berkshire Hathaway and one of the best investors in the world. But what does that mean? To risk all you have on the success or failure of one investment is the same as going to the casino.
This blog post covers all investment or asset classes, so you can understand them and build a diversified portfolio. We also show why JAVLIS should be a part of this portfolio.
Many investments exist stocks, bonds, ETFs, bank products, options, commodities, insurances, and the crypto market. In all types, it is crucial to have detailed information and knowledge to not lose your money. Let’s take a deeper look at the most important asset classes.
Shares let investors participate in a company’s success via increases in the stock’s price and through dividends. Shareholders have a claim on the company’s assets in the event of liquidation but do not own the assets.
Holders of common stock enjoy voting rights at shareholders’ meetings. Holders of preferred stock don’t have voting rights but receive preference over ordinary shareholders regarding dividend payments.
A bond is a debt instrument representing a loan made by an investor to a borrower. Bonds are commonplace in organizations that use them to finance operations, purchases, or other projects. A typical bond will involve either a corporation or a government agency, where the borrower will issue a fixed interest rate to the lender in exchange for using their capital.
Bond rates are essentially determined by interest rates. Due to this, they are heavily traded during periods of quantitative easing or when the Federal Reserve or other central banks raise interest rates.
Exchange-traded funds (ETFs) have become quite popular since their introduction in the mid-1990s. They mirror the buy-and-sell behavior of stocks. This also means that their value can change drastically during a trading day.
ETFs can track an underlying index such as the S&P 500 or any other basket of stocks with which the ETF issuer wants to underline a specific ETF. This can include anything from emerging markets to commodities to individual business sectors such as biotechnology or agriculture. Due to the ease of trading and broad coverage, ETFs are extremely popular with investors.
Commodities refer to tangible resources such as gold, silver, crude oil, and agricultural products. There are multiple ways of accessing commodity investments.
A commodity pool or “managed futures fund” is a private investment vehicle combining contributions from multiple investors to trade in the futures and commodities markets. A benefit of commodity pools is that an individual investor’s risk is limited to her financial contribution to the fund. Some specialized ETFs are also designed to focus on commodities.
Cryptocurrencies are digital or virtual currencies secured by cryptography, making it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology — a distributed ledger enforced by a decentralized network of computers. Bitcoin is the most popular and valuable cryptocurrency. There are many other currencies available.
And this is where JAVLIS comes into the game. JAVLIS is your personal cash flow butler, which assists you in earning a passive income with a double-digit annual yield on your funds. JAVLIS uses the latest blockchain technology and cryptocurrencies to generate passive income for you. The JAVLIS team is an expert in that field and is helping you get exposure to cryptocurrencies and generate cash flow.
